JEMIMA GARRETT | ABC
THE ASIAN DEVELOPMENT BANK says Papua New Guinea's big-spending budget holds risks that will need to be carefully managed.
PNG's 2013 budget calls for a 23% increase in spending.
The bank says the PNG economy remains strong but it warns that, with more challenging economic conditions expected, the government will need to manage its fiscal position carefully.
ADB economist Aaron Batten says the blow-out in costs of the PNG liquefied natural gas project could add pressure to the budget if the government is required to increase its equity contributions.
He said the risk that the government will need to go to expensive international markets to fund the deficit could place pressure on its debt strategy.